More Than Backpedaling on NAFTA

A bizarre meeting on the “Future of North America” was scheduled to take place on November 2 and 3. Members of the newly created, self-appointed “Commission on North American Prosperity” would have gathered in Toronto. Amazingly, the meeting was considered a “summit,” even though none of the presidents slated to lead it are sitting presidents. There was George H.W. Bush representing the United States, Vicente Fox standing in for Mexico, Jean Chretien for Canada, and Ricardo Lagos from Chile. All of a sudden this “summit” has been cancelled.

The cancellation remains unexplained. And the intention to carry on with this type of business-led forums, along the lines of the North American Forum that recently concluded in Ottawa, raises many questions: Are we going back to the future? Why are these former leaders “representing” countries they don’t run any more? Is their purpose to dictate to our actual presidents what to do to build North America? Why was ex president Lagos from Chile invited at all?

Since presidents George W. Bush and Vicente Fox, as well as Prime Minister Paul Martin, created the obscure Security and Prosperity Partnership of North America in 2005 (only to be silently dismissed by President Barack Obama), efforts to boost North American corporate integration have eluded public and legislative scrutiny.

In the meantime, Obama has backpedaled from his campaign commitments to renegotiate the North American Free Trade Agreement (NAFTA) so that it would emphasize fair trade, workers’ rights, and limits to investors’ privileges. Instead, the government is still expanding the accord to remove even more checks and balances on the exchange of capital, services, and goods.

Dallas Meeting

In Dallas, on October 19, top trade officials from Canada, the United States, and Mexico affirmed that “the benefits of expanding trade have flowed to businesses, farmers, workers, and consumers.” They based this on the assertion that trade among the countries has tripled in the last 15 years.

The officials also stated that “our economies have become more competitive.” But Mexico is sunk in a deep economic crisis precisely because of its dependence on the United States, which was created by NAFTA — it’s now being harder hit than any other Latin American nation.

Although rhetorically officials say they’ll help small businesses benefit from NAFTA, it’s contradictory that they are slashing “unnecessary regulatory differences” like rules of origin. These rules guarantee national content in exports, and would help small and medium companies benefit from trade. On the contrary, NAFTA has caused thousands of small and medium companies to go bankrupt. These companies failed because they were unable to compete with larger international corporations that benefit from NAFTA and, as a result, millions of workers are now on the streets. Removing rules of origin further only deprives small and medium companies from instruments for creating productive chains that would help them participate in trade.

Furthermore, the removal of the rules of origin and other regulatory legislation has been renegotiated by the three governments at their discretion, without consulting business owners, workers, or legislators. In their statement, the ministers say that their “forward-looking plan” will be “developed in consultation with all relevant stakeholders.” Haven’t we heard this before?

Security and Prosperity Partnership

What the three governments are really doing is incorporating the already-buried, George W. Bush-led Security and Prosperity Partnership (SPP) agenda into NAFTA. While current presidents are stripping the SPP label, which has garnered much negative publicity, they’re keeping its principles to armor NAFTA as an instrument for further deregulation. The North American Forum and the Commission on North American Prosperity appear to be there to continue guiding this trend. All this is being done without any explanation to the public, probably because the SPP favors only big business. The only consultative body to the SPP process has been the North American Competitiveness Council, composed of 30 of the largest corporations in the three countries.

Today, the merging of the SPP prosperity agenda into NAFTA is evident, especially after the recent Dallas meeting. In their declaration, the trade officials stated that since 2007, the three countries have worked together to protect and enforce intellectual property rights. This was one of the SPP’s plans, together with a “framework for regulatory cooperation,” a “North American plan for avian and pandemic influenza,” and an “agreement for cooperation on energy science and technology,” which are also well under way.

Although they may sound like benign plans, this business-driven demand has meant deregulation in areas such as food safety — moving to industry self-regulation — and environmental protection, including increased pesticide residue limits on hundreds of fruits and vegetables. The SPP’s “energy integration” provisions have meant churning out five times more dirty oil from Canada’s tar sands, and pressuring Mexico to privatize its state-owned oil and gas industry. This does nothing to help North America transition away from fossil fuels, and further ties Canadian and Mexican resources to insatiable U.S. energy needs. Other corporate demands have already resulted in plans to cut the “transaction costs of exports” — like NAFTA’s rules of origin — by $100 billion, according to the leaders’ latest joint statement (although a report from the governments on how much has actually been cut is pending).

NAFTA Flu

On emergency preparedness, they got it all wrong from the beginning. Instead of avian flu, we’ve got swine flu, and it originated in North America, not Asia. As Rick Arnold and I wrote in Rabble.ca, the ongoing pandemic is “in all likelihood the product of crowding and other abominable conditions in a massive U.S. owned hog-raising operation — one that took advantage of the virtual elimination of border constraints under NAFTA to set up operations in a location where regulatory enforcement was lax.” This is why H1N1 is also known as the NAFTA flu.

The SPP has also resulted in an escalation of U.S.-led militarization in Mexico, via the Mérida Initiative and other mechanisms that are ineffective in stopping the growth of human rights violations and drug-related violence. In Canada, new Homeland Security-Royal Canadian Mounted Police operations (such as the Shiprider project on the Great Lakes and shared Pacific waters) blur traditional state borders, allowing armed U.S. Homeland Security officers to operate on Canadian soil.

Now that the SPP has been quietly buried, the governments plan to continue with the NAFTA working groups in different areas for deregulatory coordination. But this time they’ve announced another group: the “Working Group on Communications and Outreach to promote greater understanding of the NAFTA and its benefits.” Presumably this group was formed to address the difficulty in demonstrating how it has benefitted businesses (other than large firms), farmers, workers, and consumers.

In the meantime, grassroots networks will continue to push for an alternative model for the three countries, one in which Mexico is allowed to develop its markets internally and within Latin America. This model would strengthen Mexican and Canadian relations, which should no longer be subordinated to U.S. economic and security imperatives.

Above all, a vision for the North American region shouldn’t be based on trade as an end in itself, but as a means to create jobs and help people retain their livelihoods and not have to migrate. Moreover, the nefarious wall erected between the United States and Mexico should be dismantled so that people, and not only capital and goods, are free — but not obliged — to move. To meet these challenges, NAFTA must be renegotiated with the full participation of small farmers, small and medium businesses, trade unions, environmental groups, lawmakers, indigenous groups, and other civil society organizations.

Manuel Pérez-Rocha, a Foreign Policy In Focus contributor, is an associate fellow at the Institute for Policy Studies.